Monday, 19 December 2016

Broccoli and Tomatoes followup: staying of proceedings due to the Commission Notice on certain articles of Directive 98/44/EC

In G 2/12 and G 2/13 (decision, blog), the Enlarged Board of Appeal concluded that the exclusion of essentially biological processes for the production of plants in Article 53(b) EPC does not have a negative effect on the allowability of a product claim directed to plants or plant material such as plant parts. The decision led to a successful maintenance in amended form in the Broccoli case (decision, blog, register) as well as in the Tomatoes case (decision, blog, register).The decision also led to a discussion in the European Commission. On 3 November 2016 ,the European Commission adopted a notice on certain articles of Directive 98/44/EC of the European Parliament and of the Council of 6 July 1998 on the legal protection of biotechnological inventions ("the (Biotech Directive"/ "The Directive"). With regard to the patentability of plants and animals obtained by means of essentially biological processes, the Commission takes the view that in accordance with the EU legislator's intention such plants and animals are not patentable under the Directive.The effect of the Commission Notice for the EPO's examination practice including any necessary follow-up measures is currently under discussion with the representatives of the member states of the European Patent Organisation.The President of the EPO has decided that, in view of the potential impact of the Commission Notice, all proceedings before EPO examining and opposition divisions in which the decision depends entirely on the patentability of a plant or animal obtained by an essentially biological process will be stayed ex officio. The details are given in the Notice that is reproduced below, together with parts of the Commission Notice.

Commission Notice on certain articles of Directive 98/44/EC of the European Parliament and of the Council on the legal protection of biotechnological inventions (2016/C 411/03)

INTRODUCTION

Directive 98/44/EC of the European Parliament and of the Council of 6 July 1998 on the legal protection of biotechnological inventions (1) (‘the Directive’) harmonises national law on the patentability of inventions relating to biological material. To this end, it sets out principles regarding the patentability of the human body and its parts, of animals and of plants.

The process leading to the adoption of the Directive lasted for more than 10 years, during which time the initial proposal (2), dating from 1988, was rejected by the European Parliament in early 1995 (3). The Commission submitted a new proposal in December 1995 (4), allowing the EU co-legislators (‘the legislator’) to reach an agreement in early 1998, notably on patentable subject matter for such inventions and the scope of protection.

The Directive covers many different categories of biological materials, ranging from elements isolated from the human body, to plants (5) and animals, and to plant breeding (including the patentability of genetically modified organisms). Since the late 1990s, there has been significant technological progress in the plant sector, through the introduction of gene markers (6) in the crossing and selection of new plants/plant varieties. These markers allow for far more rapid — and improved — results than could be achieved with the classical techniques of selecting and crossing plants. As gene markers were only in the process of being developed when the Directive was adopted, it did not specifically address the issue of the patentability of the products emanating from the use of gene markers.

In March 2015, the Enlarged Board of Appeal (‘the Enlarged Board’) of the European Patent Office (‘the EPO’) decided that products derived from using essentially biological processes might be patentable, even if the process used to obtain the product (i.e. selecting and crossing the plants) is essentially biological and thus not patentable (7). However, the patentability of such products runs into potential conflict with the legal protection provided to plant varieties under EU plant variety legislation as regards access to genetic resources (8).In December 2015, the European Parliament adopted a Resolution which asked the Commission to look into the patentability of products derived from essentially biological processes; the issue of cross-licensing between patents and plant variety rights; and access to deposited biological material, possibly by means of interpretative guidelines (9). For its part, the Council considered the matter at various meetings of the Agriculture and Fisheries (10) and Competitiveness (11) Councils. In addition, the Netherlands Presidency hosted, in cooperation with the Commission, a Symposium on 18 May 2016 (12). The consensus among stakeholders at that Symposium was for rapid and pragmatic solutions to address the identified legal uncertainty. Prior to the Symposium, the final report of the expert group on biotechnology and genetic engineering was published (13).

In view of the above, this Notice sets out the Commission's views on the patentability of products emanating from essentially biological processes (addressed in Article 4 of the Directive). It also touches upon the issues of compulsory cross-licensing between plant variety rights and patents holders (addressed in Article 12) and access to biological material by a third party (addressed in Article 13). The Notice is intended to assist in the application of the Directive, and does not prejudge any future position of the Commission on the matter. Only the Court of Justice of the European Union is competent to interpret Union law.

Article 4 of the Directive addresses the patentability of plants and animals, specifically excluding plant and animal varieties from the scope of patentable subject matter (16). It also establishes that ‘essentially biological processes for the production of plants and animals’ are not patentable (17).

Article 2 of the Directive defines an essentially biological process as consisting entirely of natural phenomena such as crossing and selection (18). However, the Directive does not state whether plants or plant material (fruits, seeds, etc.), or animals/animal material obtained through essentially biological processes, can be patented.

Even though the European Patent Organisation was not obliged per se to transpose the main provisions of the Directive into its legal corpus, nevertheless on 16 June 1999 its Administrative Council decided to amend the European Patent Convention's (‘EPC’) implementing rules in this sense (19). While Article 53(b) of the EPC already excluded from patentability plant and animal varieties and essentially biological processes for the production of plants or animals, the Administrative Council decided to insert the other main relevant provisions of the Directive into the EPC's implementing regulations rather than in the text of the EPC. The consequence of that decision is that provisions of the two texts have to be taken into consideration when the EPO assesses the patentability of plant-related inventions (20). However, if there is any conflict between these two sets of provisions, it is the EPC that prevails (21).

On the basis of this legal framework, in December 2010, decisions taken by the Enlarged Board stated that essentially biological processes, making use of gene markers for selection, were not patentable subject matter, though these decisions did not pronounce on products obtained from these processes (22). Through its subsequent decisions of March 2015, the Enlarged Board concluded (23) that a patent may be granted for plants/plant material obtained from essentially biological processes if the basic requirements of patentability are fulfilled (24). The main rationale for the March 2015 decisions of the Enlarged Board is that exclusions from the general principle of patentability have to be narrowly interpreted in law. From its analysis of the official background documents for the negotiation leading to the EPC in 1973, the Enlarged Board determined that nothing could be interpreted in the sense that plants or plant materials obtained through essentially biological processes were to be excluded from patentability.

While these decisions of March 2015 are in line with the intentions of the drafters of the EPC, it is questionable whether the same result would have been reached in the EU context. Directive 98/44/EC does not distinguish between different layers of provisions, and its provisions should be interpreted together in their entirety. When trying to assess the intentions of the EU legislator when adopting the Directive, the relevant preparatory work to be taken into consideration is not the work which preceded the signature of the EPC in 1973, but that which relates to the adoption of the Directive.

1.2 [...]

1.3 Provisions of the Directive

The final wording of the Directive does not contain a provision on the patentability of products obtained through essentially biological processes.

On the one hand, it could be argued that if the legislator had intended to exclude this subject-matter from patentability, Article 4(1)(b) could have expressly referred to such an exclusion. In addition, Article 3(1) clearly states that inventions which are new, which involve an inventive step and which are susceptible of industrial application are patentable, even if they concern a product consisting of or containing biological material. For example, plants or fruit obtained by essentially biological processes obviously consist of biological material; it could therefore be argued that there is no reason to prohibit patents on such products.

On the other hand, having regard to the preparatory work related to the Directive, as summarised above, certain provisions of the Directive are only consistent if plants/animals obtained by essentially biological processes are understood as being excluded from its scope.

Firstly, Article 3(2), which was inserted by Parliament and accepted by the Commission and the Council, states:

‘Biological material which is isolated from its natural environment or produced by means of a technical process may be the subject of an invention even if it previously occurred in nature.’

This Article could be interpreted in the sense that, to be the subject of an invention, biological material has to be isolated from its natural environment, which is definitely not the case for products obtained through essentially biological processes. Nor would the second option in this provision (i.e. production by means of a technical process) be applicable: products emanating from essentially biological processes cannot be regarded as biological material produced by means of technical processes. A biological process which consists of selection and crossing is by definition not a technical process. Therefore, it follows that plants or animals, which are covered by the generic term ‘biological material’, but which are obtained by a non-technical process (i.e. an essentially biological process), may not be the subject matter of an invention, and thus cannot give rise to a patent. It is reasonable to assume that the legislator considered it was not necessary to explicitly mention this exclusion.

Secondly, Article 4(1) of the Directive spells out the basic principle of exclusion from patentability of plant and animal varieties, and of essentially biological processes for the production of plants or animals. As an exception to this rule, Article 4(2) states that inventions which concern plants or animals are patentable if the technical feasibility of the invention is not confined to a particular plant variety (i.e. a plant grouping larger than a plant variety). This exception does not nullify the exclusion in paragraph one of this Article. An example of Article 4(2) is the case of a gene which is inserted into the genome of plants and leads to the creation of a new plant grouping characterised by this specific gene (i.e. genetic engineering). By contrast, the crossing of the whole genome of plant varieties corresponding to an essential biological process would be excluded from patentability (32).

Thirdly, recital 32 provides the legislator's explanation of Article 4. This recital states:‘if an invention consists only of genetically modifying a particular plant variety, and if a new plant variety is bred, it will still be excluded from patentability even if the genetic modification is the result not of an essentially biological process but of a biotechnological process (33);’It can be understood from this recital that, if a new plant variety is bred through an essentially biological process, then this plant variety (i.e. the product obtained) is excluded from patentability. This recital clarifies the intention of the legislator. The trigger point for ensuring the patentability of either a plant or an animal is the technical process, such as for instance the insertion of a gene into a genome. Essentially biological processes are not of a technical nature and therefore, according to the position taken by the legislator, they cannot be covered by a patent.

Finally, Article 4(3) of the Directive specifies that patents are allowed for inventions which result from a microbiological process. This provision explicitly refers to Article 4(1)(b), i.e. the exclusion from patentability of essentially biological processes for the production of plants and animals. The legislator would only have considered it necessary to mention that a microbiological process was patentable subject matter if it had considered that the product obtained by such a process was patentable. The fact that Article 4(3) exists, on the one hand highlights the patentability of products obtained by microbiological processes, and on the other, is consistent with the view that the legislator's intention was to exclude from patentability products that are obtained by essentially biological processes.

It is worth underlining that the same reasoning applies to animals. Even if, strictly speaking, there is no intellectual property right covering animal varieties at EU level, the same exception applies to animal varieties, namely that neither animal varieties nor essentially biological processes for the production of animals can be patented. The same approach — i.e. exclusion from patentability — should thus apply to animals that are directly obtained from essentially biological processes.

The Commission takes the view that the EU legislator's intention when adopting Directive 98/44/EC was to exclude from patentability products (plants/animals and plant/animal parts) that are obtained by means of essentially biological processes.

[...]

Notice from the European Patent Office dated 24 November 2016 concerning the staying of proceedings due to the Commission Notice on certain articles of Directive 98/44/EC of the European Parliament and of the Council of 6 July 1998 on the legal protection of biotechnological inventions

This text is the advance version of a Notice to be published in the OJ EPO and is reproduced from http://www.epo.org/law-practice/legal-texts/official-journal/information-epo/archive/20161212.html. The text is intended for publication in the Official Journal (OJ) of the EPO. It is made available in advance on the EPO website merely as a courtesy to the public. Only the text subsequently published in the officially certified PDF file of the OJ is authentic. It cannot be guaranteed that this advance version accurately replicates that text.

1. On 3 November 2016 the European Commission adopted a notice on certain articles of Directive 98/44/EC of the European Parliament and of the Council of 6 July 1998 on the legal protection of biotechnological inventions[ 1 ] ("the Directive"). The notice sets out the Commission's view on the intention of the EU legislator when adopting the Directive. With regard to the patentability of plants and animals obtained by means of essentially biological processes, the Commission takes the view that in accordance with the EU legislator's intention such plants and animals are not patentable under the Directive.

2. In 1999 the member states of the European Patent Organisation decided to implement the Directive by amending the Implementing Regulations to the EPC. The aim was to bring the EPC into line with the terms of the Directive, not only to reflect the obligations of EU member states belonging to the Organisation but above all to comply with the requirement for uniformity in harmonised European patent law. [ 2 ] In accordance with Rule 26(1) EPC, examining and opposition divisions use the Directive as a supplementary means of interpretation when examining European patent applications and European patents for compliance with the relevant provisions of the EPC. Judgments of the EU Court of Justice on the interpretation of the Directive are taken into account as persuasive (see Guidelines for Examination G-II, 5.2 and 5.3).

3. The effect of the Commission Notice for the EPO's examination practice including any necessary follow-up measures is currently under discussion with the representatives of the member states of the European Patent Organisation.

4. The President of the EPO has decided that, in view of the potential impact of the Commission Notice, all proceedings before EPO examining and opposition divisions in which the decision depends entirely on the patentability of a plant or animal obtained by an essentially biological process will be stayed ex officio. This concerns cases in which the subject-matter of the invention is a plant or animal obtained by an essentially biological process for the production of plants or animals. Search proceedings will not be affected.

5. If proceedings are stayed, the examining or opposition division concerned will inform the parties accordingly. At the same time, it will withdraw any communications setting them time limits to react, and will despatch no further such communications until the resumption of proceedings.

6. The present notice is immediately applicable.

[ 1 ] C (2016) 6997 final of 3 November 2016, Official Journal of the EU C 411/3 of 8 November 2016.

[ 2 ] See Administrative Council document CA/7/99 of 4 May 1999 and the notice dated 1 July 1999 concerning the amendment of the Implementing Regulations to the European Patent Convention, OJ EPO 1999, 573.

2 comments
:

The decision of the Enlarged board in the broccoli surprised me as well. I suppose one could criticize it as being too legalistic. I guess I agree with the EU commission therefore that “it is questionable whether the same result would have been reached in the EU context”

But I don’t really understand how this EU commission could have an impact on an Enlarged board decision.

As far as I can see a "commission notice" has no legal status. It is not an EU directive or regulation. The notice itself says "this Notice sets out the Commission's views on the patentability of products emanating from essentially biological processes".

Moreover, even if the notice were a legally binding document, the EPO is not an EU institute, even having non-EU members. It is only because Directive 98/44/EC is incorporated in the Implementing Regulations that they are binding. How could such a notice change the decision of an independent judge? (I do view the BoA en EBoA as such). The notice even seems to deny that status of the enlarged board as it says explicitly that “Only the Court of Justice of the European Union is competent to interpret Union law.”

If the EPO wants to follow up on the notice, the only legal I can see to do so would be to amend the implementing regulations (or the treaty itself of couse).

I fully agree with Sander, as it can be considered that the stay has no legal basis.

As long as the Rules of Implementation have not been modified by decision of the AC, there is no reason for staying any proceedings before the EPO, be it before the Examining/Opposition Divisions and especially before the BA. The Rules of implementation should not be modified following a simple opinion of the Commission. The matter could become different should the EuCJ has taken a decision, cf. Brüstle.

The task of the ED/OD is to grant patents or to maintain them if they comply with the requirements of the EPC and the case law of the BA and especially the case law of the EBA. While the decision of the EBA might be held surprising, it exists and has to be respected. Any other position is merely an abuse of power as the separation of powers between the executive, legislative and judicial power is set aside.

By not allowing cases to proceed legal uncertainty is created and this is not good for the patent system. If cases are blocked in first instance, then the BA are left to dry out. If any party considers that such a patent is to be nullified, then there is a national judge for this.

I dare think what might happen if tomorrow cases are stayed simply because the UPC has taken a decision which is not in line with the case law of the BA. Will the cases also be stayed awaiting an adaptation of the Rules by the AC in order to conform with the decision of the UPC? This should not happen, unless there is a will to make the BA submitted to the order of the UPC.

One could also consider that the stay ordered by the president of the EPO is a further measure of retaliation against the boards.

The president has shown in the past (house ban for a member of the BA) what he holds of the separation of powers: nothing.